Welcome to the show. I’m talking about doing a lease option on a property that needs a lot of work.
I’m heading home from the airport after traveling for a speaking engagement.
Here’s an exercise from yesterday’s REIA meeting in Phoenix where I spoke. Rehabbers are looking at a house that is literally full of junk. It has termite damage, needs a new roof and serious cosmetic work… at least $40,000 in rehab.
Finished, the house should be worth about $320,000, maybe more. The investors offered $240,000. I think that’s a little high, but apparently in Phoenix that’s a good offer.
But here’s the rub. The current owner owes $280,000 on it. My idea is to structure a lease option with a $280,000 contract. Rent will be paid while it’s being fixed up, and the sale will go through in a year or 2.
Contractors love these kinds of deals. They do the work themselves as the tenant buyer. When work is complete, they can buy the house or sell it to someone else.
Listen and learn:
- Learn about crafting a lease option on a house that’s in bad shape and has little equity.
- Self-employed handymen/contractors are enthusiastic about lease options.
- Info on upcoming speaking gigs will be available soon.
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